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Markets will overreact to headlines



As the saying goes, “There are lies, damn lies and statistics.”

And on the primary Friday of each month, the American public receives a wealth of latest statistics to view. Then US Bureau of Labor Statistics publishes the newest employment data. Within minutes of receiving the information, news organizations send push notifications, experts start voicing their opinions, and the headlines – and headline numbers – coalesce into a straightforward narrative, often along the lines of: “The work is done; the economy was saved” or “Employment dropped; we are all lost.”

These narratives consistently influence investors and financial markets.

How professor of finance, I feel these easy stories will not be helpful for investors. In fact, they’re harmful. The initial narratives remain unchanged, even when the underlying statistics contradict the numbers that make headlines. Therefore, on June 7, 2024 when the newest employment data will be releasedI predict that financial markets will overreact to headlines.

I get it: there’s a lot information within the two job reports released every month by the Bureau of Labor Statistics which you can pick and select which data you think that is significant. But ignoring the nuances is just not a great investment strategy. It seems that the economic reality is just too complex to fit right into a headline. As evidence, consider how markets have reacted to the last two months of employment data.

Dive deeper into the information

Lets start with Data on job offers in Aprilwhich was released on May 3.

The headline numbers were worse than expected: the unemployment rate checked to 3.9% from 3.8% within the previous month, with each non-farm and personal sector employment lower than expected.

stock Exchange united over this seemingly bad news because it viewed the disappointing jobs reports as an indication of a possible slowdown in inflation. This, in turn, could encourage the Federal Reserve to implement rate of interest cuts are back on the table for 2024 – or at the least that is what investors were counting on.

But if you dig deeper into the information, the situation becomes a bit more complex.

The unemployment rate actually got worse, rising by a tenth of a percentage point, virtually unchanged labor force participation rate. On the surface it doesn’t look too good: it looks just like the unemployment rate has increased by approx 10 basis points. This is since the bureau only calculates the unemployment rate to one decimal place. But what for those who go to two decimal places?

To do that, you wish to crunch some numbers yourself.

You can do that by going to the office Current press release regarding employment statistics, navigating through the assorted rows and columns, after which running the calculator to calculate the number for the month to one decimal place from what’s reported within the media. Then repeat the method for the last month’s data.

When you do that, you may see that the unemployment rate barely budged in April: it rose from 3.83% in March to 3.86%, a rise of just 0.03%, or 3 basis points. This suggests that the seemingly disappointing official unemployment figures weren’t that disappointing in any case.

Good headlines, bad news

You’ll see something similar for those who have a look at Employment data in Marchwhich was released on April 5.

The headline numbers were significantly better than expected, and financial markets celebrated. There was a complete increase in employment within the non-agricultural sector well above expectations303,000 jobs were created, as were the variety of employees within the private sector outside agriculture. The official unemployment rate dropped to 3.8%. On its surface there is just great news.

But for those who dig into the information, you get a unique perspective – especially the numbers showing what number of jobs have been created in government and industry. To find the relevant data – in “Table B Summary of Employment Situation” – you’ve to scroll a couple of pages to the “Current Employment Statistics” press release, however it’s all there.

for those who have a look at the stats from March, you may see that government positions account for over 20% of latest job openings. Moreover, the information shows that no jobs were created within the manufacturing sector in March.

These data suggest that March’s headlines – which suggested excellent labor market conditions – can have been deceptively sunny. Too many government jobs have been created and too few in industry. It’s not a really healthy job market.

As experts and the general public consider the employment statistics that come out on the primary Friday of every month, they needs to be careful not to simply accept the headlines as the entire story.

When it comes to the economy, easy narratives could be misleading.

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Business and Finance

Reginald Lewis’ daughter opens Beatrice Advisors




Christina Lewis, Reginald Lewis, Beatrice Advisors, Reginald Lewis

Daughter of a superstar Black financier Reginald Lewis followed in his father’s footsteps opening Beatrice Advisors to assist families like hers.

Christina Lewis opened an organization publicly on June 13 in New York. It is the primary multifamily office of its kind to be owned by a Black woman. Meredith Bowen, former partner at Seven Bridges Advisors, will function president and chief investment officer. With a few of their assets coming from the family business BFO21 and Lewis’ personal network, the band is pushing to maneuver away from the established order of occupying a particular area of interest.

Lewis’ goal is to spotlight the importance of getting a tax-efficient portfolio for the following generation of heirs, entrepreneurs and multiracial families like hers. He also desires to set a regular for having a solid team of investment managers, lawyers and accountants that clients can trust and never feel obliged to do.

“The next generation may be very uninformed, just like me and my whole family were when my dad died,” she said, recalling her father, who died when she was 12.

“He had all the intellectual capital around investing and financial access, and of course he never expected to die at 50.”

Her father was the one black person on Forbes’ list of the 400 richest Americans after appearing on the list in 1991 – with a net price of $340 million and an estimated net price of $400 million – which increased in 1992 that very same 12 months he was diagnosed with a terminal brain tumor and died in January 1993, aged just 50.

His estate was left to his wife Loida Lewis and daughters Christina and Leslie. Now, greater than 30 years later, she lives by the three mantras her father left her: do your homework and follow it, make a plan and follow it, and be good at your job.

Beatrice, apparently named after the landmark Beatrice acquisition, which was curated by Christina’s father and have become the primary Black-owned billion-dollar company, offers clients single-family offices and an progressive and technology-driven approach that encourages clients to tailor their investments to suit their individual goals. The current offer includes three key services: investment management, financial planning advice for clients and own investments.

However, Lewis doesn’t stop there and plans to expand his business over time.

Former vp and financial advisor at Shufro, Rose & CoMichael Hymes will function managing director and head of client advisory on the chief team. Bowen spoke highly of Lewis’s leadership she said she was excited to be a part of a “new level of autonomy”.

“Meeting customers where they are now and where they will be tomorrow, while giving them a new level of autonomy, makes Beatrice’s offering an exciting one,” Bowen said.

“Christina has demonstrated an exceptional ability to drive meaningful change, and I am excited to work with her and the team to build a truly differentiated set of solutions for our clients.”

The latest investment firm owner also serves as vp of the Reginald F. Lewis Foundation and is an executive producer of the upcoming biopic about her father’s life, named after his autobiography, “Why Should White Guys Have Fun?”

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Business and Finance

4 ways to protect your credit during the holidays




Black-Owned Credit-Building App, Michael Broughton

The holiday season is sort of here. But before you finalize your plans, stop and be certain that you are not practicing behaviors that might jeopardize your credit.

Falling into vacation mode – and the charging frenzy that comes with it – is what gets lots of us into trouble. Here are 4 ways to keep your credit in great shape during the holidays:

Don’t apply for retail credit cards

Getting 10% off your purchase really is not value it in the long term. Opening a brand new account could mean problems for your credit rating, as the length of your credit history accounts for 15% of your FICO rating. The older your credit age, the higher, because it shows you’ve a protracted history of credit management. Opening a brand new credit card account will lower your overall credit age and, subsequently, your rating. Applying for a loan also signifies that an inquiry can be processed on your report. Inquiries make up 10% of your FICO rating.

Be careful when shopping online

If you might be purchasing gifts online, remember to only visit sites you might be conversant in or have done business with in the past. Don’t share your credit card number with anyone.

Don’t overload

Be careful how much you spend. If at the end of the month you might be unable to repay the amount charged, reconsider your purchases. Overcharging your card will end in a rise in the amount due. Amounts owed are 30% of your FICO rating.

Don’t forget to pay your bills

It could appear obvious, but when traveling and visiting relatives, it is easy to forget to pay the bills. Set reminders on your calendar or automatic bill payments so you do not miss a payment and get a negative mark on your credit report. Your payment history accounts for 35% of your FICO rating.

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Business and Finance

4 square tips to avoid leaving money on the table




As a newcomer to the Omega Psi Phi National Convention, Karla Spencer-George has learned lots from other vendors who’ve been in the industry for years. But when she pulled out her Square bank card reader, everyone was impressed by her ability to quickly process transactions using the device on her Android phone.

“I wish they would have used it instead of a traditional machining machine,” says Spencer-George, who worked as an electrical engineer at Lockheed Martin for 12 years before founding Liberation Clothing & Gifts, LLC in February 2010.

It sells merchandise promoting Black history and culture, including T-shirts, documentaries, books, calendars and paintings. Although the company’s business is primarily online, Spencer-George also sells its merchandise at Black Run events, comparable to national and regional Black sorority and sorority conventions, Black History Month fairs, science fairs, Juneteenth observances and natural hair symposia .

Spencer-George selected to use Square for events since it was faster and cheaper than a bank card processing machine. In any case, bank card payments can account for 35% to 65% of the products it sells. She learned that despite the fact that the Square device only cost $10, she could get it back once she arrange an account. It also helped that there have been no fixed monthly fees.

Additionally, Square allowed her to call regular customers without having to re-enter their email addresses or phone numbers to send them confirmations. She was also impressed by the plug-and-play features of Square’s software.

“Just connect the device to your phone or iPad and swipe,” says Spencer-George, who also studied computer science in college. “I also see the proven fact that transactions are paperless as a bonus for me and the environment.

Already an experienced seller, Spencer-George offers the following tips to make sure you don’t miss a sale:

Perform advanced on-site testing

“It’s necessary that my bank card payment processor runs easily. Whether your event is held at an out of doors trade show or in the underground, lower level of the exhibit hall, you will need to travel to the event venue and complete a test Square transaction prior to the event. If you might be unable to get to the event location upfront, please call your ISP to discuss coverage in that area. Additionally, if a spot offers secure Internet for industrial transactions, consider purchasing it.

Don’t stop at a single point of failure

To avoid falling victim to Murphy’s Law, use two mobile devices with Square software. This way, if one device dies, you’ll have one other one. I take advantage of each a Droid phone and an iPad. I take advantage of a wireless hotspot separate from my Droid phone for iPad. This will make your Droid phone take longer to charge. Finally, I’m bringing my laptop so I can use an old-fashioned merchant account if all else fails.

Charge all of your devices

Since you might not have access to electricity during the event, make certain to charge all of your devices the night before. Before each event, I charge my Droid phone, iPad, laptop, wireless hotspot, and portable wireless charger.

Use a stylus

Invest in a stylus for touchscreen devices. Let your customers sign transactions with a stylus as an alternative of their fingers. Using a stylus is more skilled and easier for purchasers to write.

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